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Exorbitant Extra Costs: Broadcom's Aggressive VMware Agreements Push Prices Up by as Much as 1,500% for Customers

Broadcom allegedly boosts VMware licensing fees up to 15-fold and forces clients into extended, needless arrangements.

VMware licensing costs allegedly inflated up to 15-fold by Broadcom, customer contracts prolonged...
VMware licensing costs allegedly inflated up to 15-fold by Broadcom, customer contracts prolonged unduly.

Exorbitant Extra Costs: Broadcom's Aggressive VMware Agreements Push Prices Up by as Much as 1,500% for Customers

Tech firm Broadcom faces allegations of elevating VMware licensing costs by up to 15 times and forcing customers into lengthy, unnecessary contracts, as claimed by the European Cloud Competition Organisation (ECCO). Established by Cloud Infrastructure Services Providers in Europe (CISPE), ECCO was set up in response to Microsoft's compliance monitoring last year to prevent potential antitrust complaints.

Following Broadcom's acquisition of VMware in 2023, ECCO has reported a series of complaints about licensing changes, which customers have resisted. A February report by ECCO highlighted these issues, with the organisation stating that Broadcom's practices have actually worsened in recent months. In their second report, ECCO acknowledges that most CISPE members have signed new licensing agreements with VMware's owner, but added that many of these agreements were signed under pressure due to the scarcity of alternatives.

This situation has reportedly led to significant financial burdens and operational challenges for the customers. The annex to ECCO's report mentions exponential price increases for some users, with CISPE members reporting price hikes between 800% and 1,500%. Only one CISPE member has so far managed to switch from VMware, although this move came with significant internal costs and prolonged effort. Other providers have been unable to do so due to the lack of viable alternatives to VMware software and the short timelines involved.

CISPE expects an alternative to VMware to become available within a few years. Key players such as HPE, Pure Storage, and NetApp have been developing competing products to cater to customers transitioning away from VMware.

In an appeal for fair licensing, CISPE issued a list of "minimum urgent measures" that they believe would help restore fairness, such as advance notice of at least six months for any contractual terms and pricing changes, transparent pricing, flexible licensing, and safeguards for user data. In the absence of such changes, they called for regulatory action against Broadcom's alleged exploitative practices.

Unlike Microsoft, which has co-operated with CISPE to address customer concerns, Broadcom appears uninterested in addressing licensing complaints, according to CISPE's secretary general, Francisco Mingorance. Efforts to receive comment from Broadcom at the time of publication were unsuccessful.

[1] Source: European Cloud Competition Organisation (ECCO) reports available on ECCO's official website (www.eurocloudcompetition.org)[3] Source: Ars Technica: "Broadcom stealthily changes license for VMware tools used by every Linux server" (22 April 2025)

  1. In light of the alleged elevated licensing costs and lengthy contracts imposed by Broadcom on VMware customers, the cybersecurity and technology industries are facing scrutiny due to potential antitrust compliance issues.
  2. The European Cloud Competition Organisation (ECCO) has emphasized the widespread financial burdens and operational challenges that these practices have caused for customers, with price hikes between 800% and 1,500% reported.
  3. As key players in the technology industry, HPE, Pure Storage, and NetApp are developing competing products, aiming to cater to customers seeking alternatives to VMware infrastructure, in anticipation of a market shift within a few years.

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